How Do I File A Property Tax Appeal?

It is very important to file a tax appeal in the appropriate way. The way in which you file a Property Tax Appeal will vary depending on several factors: the total assessed value, the state and/or municipality the property is located and which level you are fling the appeal to. While Stavitsky & Associates’ practice is nationwide, for purposes of this discussion, we will focus on New York.

Filing a tax appeal to the administrative or first level may appear to be straightforward; however, a slew of potential issues may arise.

The first level of appeal in New York is known as the Board of Assessment Review. A Taxpayer seeking to contest the tax assessment must file a Grievance with the Board and properly serve the town and/or village with the Grievance.

The Grievance must be completed by the Taxpayer or Taxpayer’s attorney accurately and completely. It must identify: the property owner, the property by address, City/Town, Village, County, School District, parcel identification and property type. In addition, the Taxpayer or Taxpayer’s attorney must state an opinion of value on the appeal form. For example, if Taxpayer believes that its property, which is assessed for $1.5 million, is really worth $1 million, they must claim that amount. If the property happens to be worth less than $1 million, say $500,000, the taxpayer will be unable to have the value reduced below $ 1 million. Had Taxpayer consulted an attorney who is familiar with property valuation and the New York Grievance form, Taxpayer could have achieved a much higher reduction and twice as much in tax savings.

The taxpayer must provide sales data regarding the property under appeal and state the “Grounds for Complaint,” i.e., why the taxpayer believes its assessment is incorrect. In addition, the Taxpayer must state the equalization rate and what it believes to be the proper assessment. After completing all sections, the Grievance must be signed and served on the municipality. Once filed, an in person hearing may or may not be scheduled and the municipality may request additional information. If the Board is not convinced that the assessment is too high, it will deny a reduction.

Once the appeal is heard by the Board of Assessment Review and is denied, Taxpayer will have to continue to Court. Filing to Court is a much more complicated process and you are limited to the grounds and the value stated in the Grievance. If it’s subsequently determined that the property is really worth merely $100,000, Taxpayer is limited to its previously claimed value of $1,000,000! This is an example of appealing at your peril.

Besides claiming an opinion of value, it’s important for Taxpayers to understand the role of ratio in deciding whether a tax appeal should be filed. It is important to note that not every town or county assesses at 100% of market value. Let’s look at the application of the ratio in the context of a hotel tax appeal case where the value is quantified on a unit basis (per room).

A hotel could have an assessed value of $100,000 per room. Town A has an assessment ratio of 100%. The assessed market value for hotel A is $100,000 per room.

An identical hotel is located in Town B, which has an assessment ratio of 25%. Our $100,000 per room assessment would translate to a very different implied assessed market value if we knew that it was assessed at a percentage. For example, if the ratio is 25%, that means the assessed market value is $400,000 per room ($100,000 ÷ 0.25 = $400,000). That knowledge could prompt the filing of a tax appeal.

Changes in the assessment ratio occur from year to year. Let’s evaluate how a change in the assessment ratio relates to value. An office building has an assessed value of $16.5 million. A drop in ratio from 87% to 75% in the next year, results in an increase in implied market value for that building from $19 million to $22 million. Is that increase in implied market value justified where the income stream for that property is no better for both years?

We monitor these ratios from year to year to see if they are declining, which has the affect of increasing assessed market value, making the tax appeal case even stronger. These are the kinds of things Stavitsky & Associates bring to the table. We monitor ratios, we know what the equalized values are and we explain all of this to our clients so that they can make informed decisions about whether or not to challenge their real estate tax assessment.

For more information on Filing A Property Tax Appeal, a complimentary consultation is your next best step. Get the information and legal answers you are seeking by calling (973) 869-5550today.